Discover 2Q Net Surges as Credit Environment Improves

By FOXBusiness

Boosted by improving credit conditions, Discover Financial (NYSE:DFS) revealed on Thursday it more than doubled its profits in the second quarter to an all-time record.

The card giant said it earned $600 million, or $1.09 a share, last quarter, compared with a profit of $258 million, or 33 cents a share, a year earlier. Analysts had called for EPS of just 75 cents.

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Riverwoods-Ill.-based Discover grew its revenue by 4.6% to $1.74 billion, surpassing the Streets view of $1.7 billion.

Underscoring the improving credit environment, Discover said its net charge-offs slid to 4.42% from 7.97% the year earlier and 5.42% the previous quarter.

Provisions for loan losses tumbled to $176 million from $724 million in the 2010 period and $418 million in the first quarter.

Discover said total loans grew by 5% last quarter to $52.5 billion.  Total Discover Card volume jumped 11% to $26.93 billion.

Shares of Discover gained 1.31% to $23.90 ahead of Thursdays open. The stock had already been up 27% on the year and nearly 70% from 52 weeks ago.